Canadian Manufacturing

Indigo swings to near $40M yearly loss partly due to Canada Post strike impact

The brand's Q4 revenue challenges spring partly from a Canada Post strike, as well as a pullback in consumer spending

May 29, 2019  The Canadian Press

PHOTO: Indigo Books and Music/Open Grid Scheduler via Flickr

TORONTO – Indigo Books & Music Inc. widely missed expectations as it swung to a nearly $40-million net loss for its 2019 financial year, partly due to the Canada Post strike and less consumer spending in the final quarter.

The Toronto-based company reported a net loss of $36.8 million or $1.35 per common share for the year ending March 30, compared with net earnings of $22 million or 82 cents per common share the previous year.

Revenue for the year dropped $32.8 million or three per cent to about $1.05 billion from roughly $1.08 billion the previous year.

Analysts surveyed by Thomson Reuters Eikon expected a net loss of $9.3 million or 34 cents per share on $1.065 billion of revenues.

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Comparable sales, a key retail metric, dropped 1.1%.

Revenue challenges arose from, among other things, a Canada Post strike, as well as a pullback in consumer spending on non-essential items in the fourth quarter.

The company says net loss for the quarter amounted to $23.8 million, compared with a $10.7-million loss last year.

Fourth-quarter revenues fell 7.5% to $199.2 million, and comparable sales dropped 8.7%.

Indigo was expected to earn $3.7 million in the quarter on $210.7 million in revenues.

CEO Heather Reisman says in a statement that “we have every confidence in the investments we have made, in our customers’ deep affection for our brand, and in our mission to enrich the lives of Canadians.”